Sunday, 18 of February of 2018

Economics. Explained.  

Consumer Confidence

January 30, 2018

The Conference Board reported that consumer confidence rose 2.3 points in January to 125.8 after having fallen 5.5 points in December.   The November level of 128.6 was a 17-year high (November 2000).

Lynn Franco, Director of Economic Indicators at the Conference Board said “Consumers’ assessment of current conditions decreased slightly, but remains at historically strong levels. Expectations improved, though consumers were somewhat ambivalent about their income prospects over the coming months, perhaps the result of some uncertainty regarding the impact of the tax plan. Overall, however, consumers remain quite confident that the solid pace of growth seen in late 2017 will continue into 2018.”

Confidence data reported by the Conference Board are roughly matched by the University of Michigan’s series on consumer sentiment.   As shown in the chart below, trends in the two series are identical but there can be month-to-month deviations.   Any way you slice it, confidence remains at levels not seen since the early 2000’s.

The consumer should continue to provide support for overall GDP growth in 2018.  The stock market is at a record high level.  Home prices continue to climb.  Consumer net worth is at a record high level and rising.  Jobs are rising by about 170 thousand per month.  The unemployment rate is falling slowly. The consumer has little debt.  Interest rates remain low.  In addition, consumers will get a cut in income tax rates in 2018.  Clearly, the consumer’s optimism is valid.

We anticipate GDP growth of 2.8% in 2018.

Stephen Slifer

NumberNomics

Charleston, SC


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